Hudson’s Bay expects the liquidation sales to continue until the end of May, while confirming there are no “insiders” bidding on its leases, real estate holdings and trademarks.
In a court filing Wednesday, the beleaguered retailer, saddled with more than $1 billion in debt, said it will return to court next Tuesday to seek court permission to extend creditor protection until July 31 to complete the liquidation and sale of its assets. It also proposes to repay $25 million in debt under a revolving creditor facility and to pay back from time to time about $140 million owed under a FILO credit facility.
“The liquidation sale has generated cash in excess of the applicants’ operating needs,” said Jennifer Bewley, the CFO of Hudson’s Bay Company, in the court document.
The e-commerce platform of Hudson’s Bay stopped accepting orders last Friday, and sales of store fixtures, furniture and equipment are ongoing in addition to in-store inventory.
Bewley said the company is still reviewing the bids it received for the assets and has confirmed that there are no insiders — company managers or third parties with inside information — among the bidders.
Hudson’s Bay received “numerous bids” in the sales process of the company’s leases, real estate properties and intellectual properties, and will provide a comprehensive update when it seeks court approval of the asset sales by May 30, the court document read.
The company could hold a behind-closed-doors auction for the bids it deems “final qualified” around May 16.
The liquidation of Saks OFF 5th will come to an end sooner among the more than 80 stores under Hudson’s Bay Company banners across the country, Bewley said. Nine of the Saks OFF 5th stores were closed by April 27 and the remaining four stores will close by the end of this month.
Hudson’s Bay has also limited its “cash burn” by abandoning some Saks OFF 5th leases that received no bids and returning them to the landlords.
Earlier this week, the Ontario Superior Court of Justice overseeing the liquidation of Hudson’s Bay appointed a law firm to represent the company’s active and retired non-unionized employees.
Judge Peter Osborne accepted the recommendation of retired judge, Justice Herman J. Wilton-Siegel, who evaluated proposals and chose Ursel Phillips Fellows Hopkinson LLP to represent the more than 9,000 Hudson’s Bay employees facing layoffs as well as thousands of the retailer’s retired workers, according to a court document.
The court also approved Hudson’s Bay to auction off its extensive art collection of 1,700 pieces of art and more than 2,700 artifacts last month, including the 1670 charter document that paved the way for the company’s founding.
The auction plan has sparked criticism from Indigenous communities and governments who fear the historic artifacts will fall into the hands of private buyers.
According to the court document, Hudson’s Bay, its financial adviser and the auctioneer have since “engaged in numerous discussions with governmental bodies, First Nations and other indigenous groups, and various other stakeholders” from a cultural and historical perspective.
The retailer is still developing a catalogue of the art collection and procedures for the art auction, which will require court approval.
Three businesses have been identified as potential buyers of Hudson’s Bay assets. Canadian Tire and a Toronto-based investment firm, Urbana Corp., are bidding on Canada’s oldest company’s intellectual property. Weihong Liu, a B.C. billionaire and owner of several shopping centres, told the Star she has submitted a bid for 25 Hudson’s Bay’s stores.
